Health Reform: How do you enact a massive new program, and then keep it from being repealed after it fails? It’s simple. Just pull the numbers out of thin air. That’s basically what happened with ObamaCare.
When centrist Democrats were deciding whether to support ObamaCare in 2010, the “nonpartisan” Congressional Budget Office told them not to worry. The law, it said, would cut the deficit. It would bring 24 million people into the new ObamaCare exchanges. Subsidy costs would be modest. And the number of uninsured would fall by more than half. Those Dems signed on.
ObamaCare Repeal Thwarted
Seven years later, as centrist Republicans contemplated an ObamaCare repeal-and-replace plan, the CBO warned that doing so would boost the number of uninsured by 22 million. That scared enough Republicans away to kill the bill.
Turns out, all those forecasts were way off.
ObamaCare boosted the deficit in its first 10 years. Only 8 million, not 24 million, people enrolled in the ObamaCare exchanges. The average cost of ObamaCare subsidies is 11% higher, and the number uninsured 36% higher, than the CBO projected.
Had the CBO been better at predicting the future of health care under ObamaCare, it’s likely that Democrats would have scaled back their plans, while perhaps seeking Republican input.
Now we learn that the CBO wildly exaggerated the impact of the Republicans’ repeal effort when it said that 22 million would lose coverage as a result. Almost all that loss was from repealing the individual mandate.
Wildly Inflated Numbers
CBO said 7 million people would drop out of the individual insurance market. Another 4 million would lose employer coverage. And 4 million would cancel their Medicaid — even though it’s free. All in the first year.
At the time, we argued that the CBO had hugely inflated those numbers because it vastly overestimated the effectiveness of the individual mandate.
Ironically, Republicans ended up repealing the individual mandate tax penalty, but keeping the rest of ObamaCare. So what happened?
This week, the Center for Medicare and Medicaid Services released its latest annual report on national health spending. The intrepid Philip Klein at the Washington Examiner noticed that, buried in a footnote, was a stunning rebuke of those CBO forecasts.
The report says that the mandate repeal will result in only 1.5 million dropping out of the individual insurance market, and 1 million from employer plans. CMS says Medicaid enrollment will “be unaffected.”
In other words, the CBO was off by a factor of six.
These forecasting errors don’t even rise to the “good enough for government work” level. But they were good enough to get ObamaCare on the books, and then keep it there.
By Sally C Pipes • Investor’s Business Daily
Every year for the past four years, the liberal State Assembly has approved the New York Health Act, which would establish a statewide single-payer plan. But the bill always died in the State Senate, where Republicans have held the majority since 2011. These Republicans united with the centrist members of the Independent Democratic Conference to oppose single-payer.
Most of those Independent Democrats, as well as a handful of Republicans, lost their elections to progressive challengers in 2018. So when the new Democratic majority is sworn in this January, there may be enough single-payer proponents to radically reform New York’s health care system. State Senator Gustavo Rivera, a Bronx Democrat, has pledged to put forward a new single-payer bill in January. Assembly Member Richard Gottfried, a Democrat from Manhattan, confidently predicted the legislature is “on track” to pass the proposal. Continue reading
By Christopher Jacobs • The Federalist
Now they tell us! A Gallup poll, conducted last month to coincide with the midterm elections and released on Tuesday, demonstrated what I had posited for much of the summer: Individuals care more about rising health insurance premiums than coverage of pre-existing condition protections.
Of course, liberal think tanks and the media had no interest in promoting this narrative, posing misleading and one-sided polling questions to conclude that individuals liked Obamacare’s pre-existing condition “protections,” without simultaneously asking whether people liked the cost of those provisions.
Overwhelming Concern about Premiums
The Gallup survey asked the public whether it viewed each of four scenarios as a major concern for them. Among those: “Your health insurance plan will require you to pay higher premiums or a greater portion of medical expenses,” and “you or someone in your immediate family will be denied health insurance coverage for a pre-existing medical condition.” Continue reading
by Doug Badger • National Review
Critics of American health care often ask why ours is the only highly developed country without a taxpayer-funded universal health-care system.
It is a question meant to answer itself: There is no good reason, so the U.S. should fall in line with European financing methods. That is the view of advocates of “Medicare For All,” a proposal backed by most House Democrats.
But the question deserves more than a rhetorical response. Health care is financed differently in the United States because it evolved differently. Private arrangements among hospitals, doctors, employers, and labor unions to finance medical insurance developed and matured over the course of decades, abetted by government policy that treats employer-sponsored health benefits differently than wages for tax purposes. That generally did not happen in Europe.
The American approach offers several advantages that often are overlooked. Continue reading
By Charlie Katebi • The Federalist
Over the last several years, states that expanded Medicaid to able-bodied adults have seen costs skyrocket and patients lose access to critical medical care. Yet despite this disastrous track record, many are recklessly rushing to expand Medicaid in their states.
On July 6, Medicaid expansion advocates delivered boxes full of signatures to Idaho’s secretary of state to place the issue on the state’s ballot in November. Just one day earlier, another ballot drive collected enough signatures to expand Medicaid in Nebraska. In Maine, pro-Medicaid lawmakers are preparing to raise fresh new taxes to grow the program.
The leaders of these campaigns argue that expanding Medicaid will provide health care access to the needy. Unfortunately, expanding coverage to able-bodied adults imposes enormous harm on Medicaid’s traditional enrollees, which include individuals with severe Continue reading
By Nan Hayworth • The Hill
As a physician whose career in medicine was dedicated to preserving and improving my patients’ health, I know firsthand how important it is for everyone to have access to care. This is a fundamental precept, morally and pragmatically sound, that should be honored by all who seek to transform for the better America’s flawed system of health care delivery.
Regrettably, since its passage in 2010, the Affordable Care Act (ACA) has had the net general effect of raising the cost of health insurance while reducing the quality and variety of the services that insurance covers. This is the opposite of what was intended — but the suffering engendered thereby is real and painful.
The best-case remedy would be to repeal the ACA completely and replace it with a much simpler, more targeted set of common-sense interventions to empower consumers and ensure their access to Continue reading
By Sally C. Pipes • Investor’s Business Daily
ObamaCare enrollees should brace themselves for another year of double-digit premium hikes.
Average premiums for plans sold through the state and federal insurance exchanges will jump as much as 32% next year, according to a recent report from actuarial firm Milliman. Consumers in some markets could face 80% rate hikes, according to a separate analysis from Blue Cross Blue Shield.
Democrats have pounced on these projections to blame the GOP for “marketplace sabotage.” Senate Minority Leader Chuck Schumer, D-N.Y., remarked that “Republicans and the Trump administration own any and all increases in health care premiums for American consumers.”
Sorry Chuck, but GOP malfeasance isn’t the problem. ObamaCare’s burdensome Continue reading
By Charles Silver & David A. Hyman • National Review
If you’ve ever been in a collision, you’ve probably dealt with a body shop. In all likelihood, the process went smoothly. You paid your deductible, your insurer paid the rest, and that was the end of the financial side of the repair.
Health care works differently. After eight-year-old Ben Millheim injured himself during a camping trip, his family was stuck with a $32,000 bill from the sky-ambulance company that flew him 88 miles to a hospital in St. Louis. That was the balance that remained after the Millheims’ insurer paid $12,000 for the service. Elizabeth Moreno was stuck with a bill for $17,850 because a physician asked her to provide a urine sample. She didn’t know that the doctor’s testing lab was out of her insurance network. Moreno’s insurer, Blue Cross Blue Shield of Texas, which would have paid an in-network lab $101 for the service, refused to cover the bill at all. Fearing for his daughter’s credit rating, Moreno’s father bargained the bill down to $5,000 and paid.
The Millheims and Morenos are but two of the tens of thousands of families who receive surprise medical bills every year. These are “balance bills,” that seek to hold patients responsible for charges their insurers won’t pay. The problem is so bad and so Continue reading
Health Reform: For three years running, the uninsured rate has remained unchanged, new government data show. That means, despite massive taxpayer costs, ObamaCare is tapped out. It’s time to try something better.
According to the Centers for Disease Control, the overall uninsured rate last year was 9.1%, the same as it was in 2015.
If you take out retirees, who are automatically covered by Medicare, the uninsured rate was 10.7% last year, up a fraction from 10.5% in 2015.
The uninsured rate for the near poor Continue reading
It’s beginning to look like the Republicans have pretty much abandoned their promise to “repeal and replace” Obamacare. Considering they don’t have the votes to do it this does not come as a big surprise. If they want to remain in power though, they have to come up with something.
Fortunately, President Donald Trump is leading and may announce as soon as Thursday a plan to bring the cost of prescription drugs down using market forces rather than mandates. Working through Health and Human Services Secretary Alex Azar, the administration is expected to strongly endorse price competition though the formulary process (developing a list of approved drugs selected to provide the most value) as the key to controlling drug costs.
This is what the voters want. According to several recent polls controlling drug costs is one of the three or four issues most important to people deemed likely to vote in the next elections. Therefore, it’s fortunate good policy and good politics are intersect this way.
Even common-sense approaches to controlling costs — like moving prescription drugs from Medicare Part B to Medicare Part D to increase the government’s ability to negotiate on price — will face fierce opposition on Capitol Hill from drug makers (PhRMA spent $150 million in advertising in favor of Obamacare passage) and from those who believe a Bernie Sanders-style single payer approach is the only reform Congress should even think about enacting.
It’s up to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell whether they want to follow Mr. Trump’s lead and go further. They’ve been burned, badly, by their failure to “repeal and replace” and with their colleagues are reluctant to take up the issue again.
From a political standpoint, that would be an epic fail leading to serious consequences for the GOP’s congressional majority. Rather than wipe the slate clean, they can utilize now-proven concepts used by pharmacy benefits managers, or PBMs, to produce savings for consumers. Again, this is something the voters want.
No one has to go all in at first. Moving drugs to Medicare Part D as a demonstration project for certain therapeutic classes could be the first step toward future, system-wide reform if, as it is almost certain to do, it works.
On the formulary side, the idea of allowing approved plans to cover just one drug per category or class within Medicare’s protected classes rather than two would also increase the government’s bargaining power on behalf of patients. That could be a tough sell in a town where drug companies spend millions on lobbyists to make sure that profits stay high, but as part of a package of reforms coming out of HHS to lower drug prices and reduce out-of-pocket costs it would just be one of many changes producing cheaper health care without compromising quality or access.
The changes the administration is expected to make can be enacted quickly and efficiently. Costs will come down in the near term in a way meaningful to most consumers. In the long run there’s still much to be done.
Obamacare did not deliver on its promise: People lost the health care they liked, what they could get was more expensive, year by year, and the range of choices available to them contracted. The only way to fix that permanently, as health care experts Grace-Marie Arnett and Marie Fishpaw explained recently, is for Congress to take up a plan addressing three big goals: 1) lower costs and improve patient choices, 2) give states flexibility and resources to achieve these goals, and 3) set federal guardrails so people can choose private coverage if they don’t like the options their state provides.
As Ms. Arnett and Ms. Fishpaw put it, America needs health care reform that recognizes “what works in Massachusetts will not work in Mississippi or Missouri or Montana. What works in big cities will not work in rural areas. In response, we would provide states with greater flexibility and new resources to serve as stewards in returning freedom and choice over health decisions to patients.”
To get to that point, the GOP needs a bigger majority in the U.S. Senate and to hang on in the U.S. House of Representatives. Right now, the Republicans look to be losing seats in the House and probably the majority. That would be the end of real reform. A Democratic majority will define reform as an increase in the role for government and a taxpayer-funded bailout of insurance plans.
What Mr. Trump is supposedly getting ready to propose may not just save health care but may also save the Republican majority, which cannot get through the election without addressing the issue. Finding and supporting ways to cut the cost of prescription drugs may be, in the short run, the only option left.
We keep hearing about how short-term health plans are “junk insurance.” Really? Compared to ObamaCare’s high-deductible HMOs, or Medicaid’s long and often deadly waits?
A new study finds that at least 21,900 people on Medicaid have died waiting for treatment in states that expanded Medicaid eligibility under ObamaCare.
The reason, the Foundation for Government Accountability report says, is that ObamaCare opened Medicaid up to millions of able-bodied non-poor adults. That created a surge in demand for scarce Medicaid resources, forcing the poor to wait longer for services.
An insurance plan that you can’t use? That’s junk insurance. Continue reading
By Fred Lucas • Fox News
Texas AG Ken Paxton and Wisconsin AG Brad Schimel on the lawsuit to end ObamaCare and the future of DACA.
Idaho has become ground zero in a new ObamaCare fight, with officials pursuing major changes that could serve as a national model for other states looking to expand insurance options in defiance of the law – even as Democrats warn of higher costs for vulnerable customers.
As soon as April, Blue Cross of Idaho is planning to make new options available.
That’s after Gov. Butch Otter and Lt. Gov. Brad Little co-signed an executive order asking the Department of Insurance to seek creative ways to make health coverage more affordable. The move opened the door for plans that don’t adhere to ObamaCare coverage requirements – though with the Trump administration testing similar ideas, the state may be unlikely to face much resistance from the White House.
The state’s insurance department now aims to let insurers sell cheaper, less comprehensive plans that officials project Continue reading
By Christopher Jacobs • The Federalist
The Center for American Progress proposed a plan for government-run health care Thursday, which the liberal think tank calls “Medicare Extra.”
Unlike Bernie Sanders’ single-payer system, which would abolish virtually all other forms of insurance, the plan would not ban employer coverage outright — at least not yet. In broad strokes, CAP would combine Medicaid and the individual insurance market into Medicare Extra, and allow individuals with other coverage, such as employer plans, traditional Medicare or VA coverage, to enroll in Medicare Extra instead.
Page 4 of the proposal makes it clear this plan is not moderate, and it would shift the health care market firmly into the government’s control: “Newborns and individuals turning age 65 would be automatically enrolled in Medicare Extra. This auto-enrollment ensures that Medicare Extra would continue to increase in enrollment over time. [Emphasis mine.]”
The goal of CAP’s plan is to grow government, and to grow dependence on government. The paper omits many important policies, such as how to pay for the new spending. Here are some of the major objectives and concerns.
If You Like Your Obamacare, Too Bad
After attacking Republicans for wanting to “taking away health insurance from millions,” CAP would … take away health insurance from millions. The plan would effectively eliminate Obamacare’s insurance exchanges, and all individual health insurance: “With the exception of employer-sponsored insurance, private insurance companies would be prohibited from duplicating Medicare Extra benefits, but they could offer complementary benefits during an open enrollment period.”
Other sections of the plan (discussed further below) suggest that private insurers could offer Medicare Choice coverage as one element of Medicare Extra. CAP indicates that persons purchasing coverage on the individual market would have a “choice of plans.” But didn’t Obamacare promise that already — and how’s that working out? For that matter, what happened to that whole “If you like your plan, you can keep it” concept?
Moreover, the plan would also “integrate” Medicaid into Medicare Extra, “with the federal government paying the costs.” CAP provides few details on how exactly that “integration” would work, but suffice it to say that the able-bodied adults covered by Obamacare’s Medicaid expansion could face some interesting transitions as a result of this plan.
Mandatory Health Insurance — And A $12,550 Tax
The plan reinstates a mandate to purchase health insurance: “Individuals who are not enrolled in other coverage would be automatically enrolled in Medicare Extra … Premiums for individuals who are not enrolled in other coverage would be automatically collected through tax withholding and on tax returns.”
While the plan says that those with incomes below the tax filing threshold “would not pay any premiums,” it excludes one important detail — the right to opt out of coverage. Therefore, the plan includes a mandate, enforced through the tax code, and with the full authority of the Internal Revenue Service. (Because you can’t spell “insurance” without I-R-S.) The plan indicates that for families with incomes between 150 and 500 percent of the poverty level, “caps on premiums would range from 0 percent to 10 percent of income. For families with income above 500 percent of [poverty], premiums would be capped at 10 percent of income.”
In 2018, the federal poverty level stands at $25,100 for a family of four, making 500 percent of poverty $125,500. If that family lacks employer coverage (remember, the plan prohibits individuals from buying any other form of private insurance), CAP would tax that family 10 percent of income — $12,550 — to pay for its Medicare Extra plan.
Moreover, the plan does not specify whether it caps the 10 percent threshold for families over 500 percent of poverty at the actual cost of premiums. (For instance, would a family with income of $200,000, but premium costs of $15,000, pay only their premium cost of $15,000, or $20,000 as 10 percent of their income?) If the latter, it would represent an even greater cost on middle-class families.
Wasteful Overpayments Controlled By Government Bureaucrats
As noted above, the plan would allow insurers to bid to offer Medicare Choice coverage, but with a catch: Payments provided to these plans “could be no more than 95 percent of the Medicare Extra premium.” CAP claims that “this competitive bidding structure would guarantee that plans are offering value that is comparable with Medicare Extra.”
It does no such thing. By paying private plans only 95 percent of the government-run plan’s costs, the bidding structure guarantees that private plans will provide better value than the government-run plan. Just as CAP decried “wasteful overpayments” to private insurers in Medicare Advantage, the CAP proposal will allow government bureaucrats to control billions of dollars in wasteful federal government spending on Medicare Extra.
Costs To States
As noted above, CAP envisions the federal government taking over Medicaid from the states, “given the continued refusal of many states to expand Medicaid and attempts to use federal waivers to undermine access to health care.”
Translation: “If you don’t do exactly what we demand, we will punish you.” For a similar reason, the paper notes that legislation implementing the plan should “leave little to no discretion to the Administration on policy matters” — because Congress doesn’t try to micro-manage enough of the federal government as it is.
But the plan also requires states to continue to make maintenance-of-effort payments even after the federal government takes Medicaid away from state jurisdiction. Moreover, the plan by its own admission “giv[es] a temporary discount [on the maintenance-of-effort provisions] to states that expanded their Medicaid programs” under Obamacare — effectively punishing states for a choice (i.e., to expand or not expand) that the Supreme Court made completely voluntary. And finally, it requires “states that currently provides benefits … not offered by Medicare Extra … to maintain those benefits,” leaving states perpetually on the hook for such spending.
Would Employer Coverage Really Remain?
The plan gives employers theoretical options regarding their health coverage. Employers could continue to offer coverage themselves, subject to certain minimum requirements. Alternatively, they could enroll their employees in Medicare Extra, with three possible sources of employer funding: Paying 70 percent of workers’ premiums, making maintenance-of-effort payments equal to their spending in the year preceding enactment, adjusted for inflation, or “simpler aggregated payments in lieu of premium contributions,” ranging from 0 to 8 percent of payroll. (The plan would exempt employers with under 100 full-time equivalent workers from making any payments.)
Two questions linger over these options: First, would employer coverage remain? CAP obviously wishes that it would not in the long-term, while recognizing the political problems associated with an abrupt transition. Second, could employers game the system among the various contribution options? While details remain unclear, any plan that sets up two systems (let alone four) represents a classic arbitrage opportunity. If employers act rationally, they could end up reducing their own costs in a way that significantly increases the federal government’s obligations.
Higher Health Spending
CAP advertises its plan as providing “zero or low deductibles, free preventive care, free treatment for chronic disease” — the source of 75 percent of American health care spending — and “free generic drugs.” It would also expand coverage of long-term care services not covered by Medicare (and only partially covered by Medicaid). But all this “free” stuff won’t come cheap.
In analyzing Bernie Sanders’ health care plan, the liberal Urban Institute estimated that it would increase overall health spending by 22.1 percent. Notably, the Urban researchers estimated that Sanders’ plan would raise spending by people who currently have health insurance by almost the same amount, or 15.1 percent, because the lack of cost-sharing will encourage individuals to increase their consumption of care. With the CAP plan apparently proposing that government fully subsidize more than three quarters of health care spending, its proposal will increase health care costs almost as much as Sanders’.
The CAP plan proposes measures to lower costs — namely price controls (i.e., Medicare dictating prices to doctors, hospitals, and drug companies), with some token references to other policies like bundled payments and limiting the tax preference for employer-sponsored insurance. But if those proposals go the way of Obamacare’s “Cadillac tax” — potentially never implemented because politicians of both parties lack the discipline to control health care spending — then the plan will only raise health costs rather than lower them.
Something For Nothing
The plan proposes that families with incomes below 150 percent of poverty ($37,150 for a family of four this year) pay for their coverage the princely sum of … zero dollars. No premiums, no deductibles, no co-payments. Zero. Zip. Zilch. Nada.
And while CAP does not include specific ideas to pay for all the associated new spending, the concepts it does propose largely involve taxing “the rich” (which includes small businesses).
While it doesn’t work as it should — most people “get back” far more than they “pay in” — at least Medicare makes an attempt to have all individuals pay for coverage through the payroll tax. CAP’s plan amounts to a transfer of wealth from one group to another.
Even The New York Times this week highlighted dissent from middle-class families upset at the thought of having to pay for low-income individuals to receive “free” Medicaid. So, CAP might want to rethink what Bill Clinton called “the craziest thing in the world” — making middle-class families pay even more for mandatory insurance ($12,550, anyone?) while certain families contribute not so much as a dime for coverage — along with just about every other element of its health care plan.
The Trump administration moved Tuesday to allow health insurers to sell lower-cost, less-comprehensive medical plans as an alternative to those required under ObamaCare – in a plan that drew swift protest from congressional Democrats.
The proposed regulations would allow insurers to sell individual consumers “short-term” policies that can last up to 12 months, have fewer benefits, and come with lower premiums.
The plans also would come with a disclaimer that they don’t meet the Affordable Care Act’s consumer protection requirements, such as guaranteed coverage. Insurers could also charge consumers more if an individual’s medical history discloses health problems.
But at a time of rising premiums, Trump administration officials touted the option as a boost for those who need coverage but don’t qualify for the Affordable Care Act’s subsidies and would otherwise face paying the full premium cost.
By John Daniel Davidson • The Federalist
The Trump administration announced Thursday it will allow states to impose work requirements on abled-bodied adults to qualify for Medicaid. This marks the first time the federal government has allowed any kind of work requirement for Medicaid eligibility—and it’s about time.
On the surface, work requirements for Medicaid might seem cruel or punitive. After all, Medicaid is supposed to provide health coverage to the poor and disabled, the most vulnerable among us. As a policy proposal, work requirements may seem almost tailor-made to make Republicans look cold and heartless.
But the reality is that Medicaid, like most federal and state welfare programs, has gotten so out of control and strayed so far from its original purpose that imposing work requirements on able-bodied adults will actually help enrollees far more than Medicaid coverage will, mostly by giving them a strong incentive to secure full employment. Continue reading